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Redundancy: taxation of termination payments

A shakeup of the taxation of termination payments, specifically payments in lieu of notice (PILONS), will see the removal of the long-standing £30,000 tax-free amount. Mark Cawthron,  tax writer at Wolters Kluwer, explains the changes for employers and employees

Every business has on occasion shed members of staff, whether on grounds of redundancy, performance, or other reasons. As a result, many businesses and accountants are quite familiar with the £30,000 exemption from tax, for payments to departing employees.

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